REG - HydrogenOne Cap Gwth - Q3 2023 Net Asset Value and portfolio update

Hydrogenone Capital GrowthAnnouncement

14/11/2023 07:15

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RNS Number : 2930T  HydrogenOne Capital Growth PLC  14 November 2023

LEI: 213800PMTT98U879SF45

 

14/11/2023

HydrogenOne Capital Growth plc

("HydrogenOne" or the "Company")

 

 

Q3 2023 Net Asset Value and portfolio update

HydrogenOne, the first London-listed fund investing in clean hydrogen for a
positive environmental impact, today announces its quarterly net asset value
and portfolio update for the period ended 30 September 2023.

Key highlights for the quarter

·    Net Asset Value ("NAV") per share of the Company 101.4 pence; broadly
similar to 30 June 2023 (100.7 pence), and an increase of 5.1% since 30
September 2022. NAV includes 0.62 pence reduction for accrual of carry;

 

·    Continued revenue growth delivery from private portfolio companies,
delivering an aggregate £63 million in total revenue in the 12 months to
September 2023, an increase of 174% compared to the 12 months to September
2022;

 

·    The recent €45m investment in Elcogen by HD Hyundai and €25
million "Important Projects of Common European Interest" (IPCEI) grant funding
underscores HydrogenOne's valuation and introduces a major industrial
strategic investor;

 

·    Sunfire awarded an industry-leading 100MW electrolyser order, and
€169 million IPCEI grant funding;

 

·    Cranfield Aerospace announces a partnership with Dronamics, its
second platform for hydrogen flight;

 

·    HH2E and Gen2 Energy progress new hydrogen sales agreements in
Germany;

 

·    Investments in the quarter totalling £1.6 million in two existing
portfolio companies; cash and cash equivalents of £6.5 million, and £2.4
million of listed hydrogen companies at the end of the quarter.

 

 

 

Net asset value

At 30 September 2023, the unaudited NAV per share of the Company was 101.4
pence, representing an increase of 0.7% from 30 June 2023, and an increase of
5.1% from 30 September 2022. The Company had net assets of £130.6 million as
of 30 September 2023.

The quarterly increase was driven primarily by valuation uplifts to the
Company's portfolio of private investments, positively contributing 2.24 pence
(2.2%) per share to the NAV movement, with Strohm contributing the largest
increase of 0.98 pence per share (1.0%) compared to 30 June 2023.

 

NAV movements

 Opening NAV per share at 30 June 2023       100.70p
 Portfolio valuation uplifts                 1.70p
 Accrual for Investment Adviser carry        (0.62)p
 FX gains/(losses)                           0.65p
 Fund expenses                               (1.00)p
 Closing NAV per share at 30 September 2023  101.42p

 

 

Financial summary

                                             30 September 23  30 June 23  Change   30 September 22  Change
 NAV                                         £130.6m          £129.7m     0.7%     £124.3m          5.1%
 NAV per share                               101.42p          100.70p     0.7%     96.49p           5.1%
 Portfolio valuation                         £125.2m          £120.5m     3.9%     £103.3m          21.2%
 Portfolio fair value gain / (loss) on cost  £14.5m           £11.6m      24.8%    £3.1m            368%
 Cash and cash equivalents                   £6.5m            £8.9m       (27.1)%  £23.1m           (71.9)%
 Other net assets                            £(1.1m)          £0.2m       (630) %  £(2.1m)          (47.6)%

 

 

 

Investment activity

·    The Company made £1.6 million of follow on investment in two
portfolio companies during the quarter: Cranfield Aerospace Solutions Ltd and
NanoSUN in the United Kingdom.

 

·    The Company had cash and cash equivalents of £6.5 million, and £2.4
million of listed hydrogen companies at the end of the quarter, and remains
well funded for its day-to-day activities.

 

·    $7 billion US Department of Energy funding for seven clean hydrogen
hubs announced, combined with continued strong policies in the EU again
underlines the supportive regulatory regimes in many regions for clean
hydrogen.

 

 

 

Portfolio

·    At 30 September 2023, the Company has invested in ten private
investments, in the UK and Europe, representing 98.0% of its invested
portfolio by value. Additional investment in strategic, global hydrogen
equities represented 2.0% of the invested portfolio.

 

·    The portfolio continues to perform in line with the expectations of
the Investment Adviser, HydrogenOne Capital LLP.

 

·    Eight of the Company's ten private investments are
revenue-generating, producing equipment and technology solutions for clean
hydrogen production. The unaudited aggregate revenue from these investments
was c. £63 million in the 12-month period to 30 September 2023, an increase
of 174% compared to the 12 months to September 2022, on a pro-forma basis

 

·    The portfolio weighted average discount rate at 30 September 2023 was
13.5%, higher than 30 September 2022 (13.1%), reducing NAV by 3.0 pence per
share. The 30 June 2023 weighted average discount rate was 13.7%, increasing
30 September 2023 NAV by 0.7 pence per share compared to 30 June 2023.

 

 

Portfolio developments

Sunfire GmbH, a leading German industrial electrolyser producer: (19.4% of
NAV)

·    Sunfire has secured a contract to supply a 100 MW pressurized
alkaline electrolyser to a European refinery. The purchase order includes ten
modules of Sunfire's highly reliable pressurized alkaline electrolysis
technology, each with a capacity of 10 MW, as well as the power supply units.
Sunfire will be responsible for supervising the subsequent installation and
commissioning of the system, which is due to commence operation in early 2026.
This marks Sunfire's entry into the large-scale electrolysis sector.

 

·    Sunfire received a €169 million grant from IPCEI to support its
growth plans. Sunfire is investing in total some around €400 million to
establish industrial series production of its technologies, and validating
them in Saxony and North Rhine-Westphalia, aiming for GW scale over time.

 

·    After the end of the quarter, the GET H2 TransHyDE joint project,
based in Lingen achieved first hydrogen production, on the site of the RWE
gas-fired power plant in Emsland (KEM) using a high-temperature 250 KW solid
oxide electrolyser (SOEC) from Sunfire.

 

Elcogen, a leading innovator and supplier of solid oxide fuel cell and
electrolyser components: (17.1% of NAV)

 

·    Elcogen was awarded funding from IPCEI for a €25.4m project to
accelerate the deployment of its solid oxide technology, to enable affordable
green hydrogen production in Europe.

 

·    After the end of the quarter, Korea Shipbuilding & Offshore
Engineering, a member of HD Hyundai Group, invested €45m in Elcogen.  This
investment will be used to expand Elcogen's manufacturing capacity, with the
company's new factory facility in Tallinn, Estonia, due to begin construction
shortly. This facility should add manufacturing capacity of up to 360MW to
meet increasing demand for Elcogen's products, with 100MW capacity planned for
Phase 1. The investment by HD Hyundai underscores both the Company's strategy
of backing the leading innovators in the hydrogen industry, and its valuation
of Elcogen. Following this investment, HD Hyundai and Elcogen intend to
further strengthen their collaboration with a focus on marine propulsion
systems and stationary power generation, based on Elcogen's proprietary solid
oxide fuel cell technology, with the intent to manufacture products in South
Korea.

 

 

Strohm Holding B.V., a Netherlands-based hydrogen pipeline company: (15.1% of
NAV)

 

·    Strohm successfully installed its first deep-water / high pressure
thermoplastic composite pipe (TCP) jumper in Guyana at water depths of 1,700m.
TCP offers significant greenhouse gas emissions savings compared to
traditional solutions, and has significant growth prospects in transporting
offshore hydrogen and CO2.

 

 

Cranfield Aerospace Solutions Ltd ("CAeS"), a UK hydrogen flight innovator:
(9.1% of NAV)

·    CAeS unveiled its newly refurbished hangar and R&D facility for
the development of zero emissions aircraft. The facility, leased by CAeS, has
undergone major refurbishments as part of Cranfield University's
decarbonisation plan, with significant investment into reducing the building's
carbon footprint.

 

·    CAeS announced a three-party agreement with MONTE Aircraft Leasing
(MONTE) and Australian air charter company Torres Strait Air to convert up to
ten Britten-Norman Islander aircraft to hydrogen-electric power.

 

·    CAeS has adjusted its strategy, and intends to deploy its innovative
hydrogen flight technology across multiple platforms, and at the same time to
develop further IP in hydrogen powered flight. The previously-announced plan
to merge CAeS and Britten-Norman has been replaced with the intent to further
strengthen the strategic co-operation between these two separate parties.

 

·    After the end of the quarter, CAeS and Dronamics announced a
Memorandum of Understanding to further progress the application of the CAeS's
hydrogen-electric propulsion system to the Dronamics Black Swan cargo drone
aircraft. This agreement confirms the position of CAeS as the preferred
supplier of HFC propulsion systems to Dronamics and includes a letter of
intent for the supply of a substantial number of propulsion systems from 2026.
This opens a new route to market for its hydrogen-electric propulsion system,
alongside existing arrangements with Britten-Norman.

 

Bramble Energy (6.5% of NAV) is a UK-based fuel cell and portable power
solutions company:

 

·    Bramble Energy announced the opening of its new state-of-the-art
headquarters in Crawley, West Sussex. The expansive new facility, which
includes a world-leading hydrogen innovation and development hub, and builds
on the company's strong growth since launching in 2016.

 

 

HH2E is a green hydrogen project developer with a focus on industrial
customers in Germany: (3.4% of NAV). HH2E is the operator of the Thierbach
green hydrogen development project, in which HGEN has a direct
investment:(1.4% of NAV)

 

·    HH2E has placed an order with BASF Stationary Energy Storage GmbH
(BSES) for 93MWh of high-capacity Sodium Sulphur batteries (NAS® Batteries).
Additionally, HH2E has reserved production capacity for a further 140 MWh of
these batteries.

 

·    DHL Group, HH2E, and Sasol announced plans to collaborate to "Propel
Germany as a Leader in Decarbonized Aviation". The intent is for the
production of sustainable aviation fuels in Germany, using HH2E-supplied green
hydrogen, for an initial capacity of 200,000 tonnes per annum, with potential
to scale up to 500,000 tonnes per annum.

 

·    After the end of the quarter, HH2E announced plans for a supply
agreement for green hydrogen with Germany hydrogen refuelling leader H2
Mobility, aimed at the transport sector.

 

 

Gen2 Energy (3.0% of NAV) is a Norwegian green hydrogen project developer

 

·    Gen2 Energy received a general building permit from Vefsn
municipality for its proposed hydrogen plant in Mosjøen, Norway and for the
associated administrative building. The Nesbruket-1 plant, at this site, is
targeting final investment decision in 2024 for a 120MW green hydrogen
facility.

 

·    After the end of the quarter, Gen2 Energy and SEFE Securing Energy
for Europe (SEFE), via its subsidiary WINGAS GmbH, signed a Transaction Term
Sheet for the delivery of green hydrogen. This defines the terms and
conditions for a final Sales and Purchasing Agreement and represents a major
step to realize the import of green hydrogen from Norway to Germany.

 

 

Further details on the Company's private investments, including the new
investments referenced above, can be found on its website at
https://hydrogenonecapitalgrowthplc.com/portfolio/private-investments
(https://hydrogenonecapitalgrowthplc.com/portfolio/private-investments) .

Factsheet and investor webinar

The 30 September 2023 factsheet is now available on the Company's website:
https://hydrogenonecapitalgrowthplc.com/investors/factsheets/.

The Company's Investment Adviser, HydrogenOne Capital LLP, will be hosting a
30-minute live webinar presentation for investors and analysts on Q3 2023
Factsheet and NAV update commencing at 11.00 GMT today.

 

In order to register for the webinar, please follow the link:
https://www.investormeetcompany.com/hydrogenone-capital-growth-plc/register-investor
(https://www.investormeetcompany.com/hydrogenone-capital-growth-plc/register-investor)
.

 

The presentation will also be available on the Company's website at
https://hydrogenonecapitalgrowthplc.com/investors/documents-and-publications/
(https://hydrogenonecapitalgrowthplc.com/investors/documents-and-publications/)
.

 

 

Notes

 

This announcement is not an offer for sale or subscription or solicitation to
purchase shares in any jurisdiction. This announcement contains inside
information.

 

For further information, please visit www.hydrogenonecapitalgrowthplc.com
(http://www.hydrogenonecapitalgrowthplc.com) or contact:

 

 HydrogenOne Capital LLP - Investment Adviser                 +44 20 3830 8231
 Dr. JJ Traynor/Richard Hulf

 Barclays Bank PLC - Corporate Broker                         +44 20 7623 2323

 Dion Di Miceli                                               BarclaysInvestmentCompanies@barclays.com

 Stuart Muress

 Buchanan - Public Relations

 Henry Harrison-Topham / Henry Wilson / George Beale

 +44 (0) 20 7466 5000

 HGEN@buchanancomms.co.uk (mailto:HGEN@buchanancomms.co.uk)

 

About HydrogenOne:

 

HydrogenOne is the first London-listed hydrogen fund investing in clean
hydrogen for a positive environmental impact. The Company was launched in 2021
with an investment objective to deliver an attractive level of capital growth
by investing in a diversified portfolio of hydrogen and complementary hydrogen
focussed assets. INEOS Energy is a strategic investor in HydrogenOne. The
Company is listed on the London Stock Exchange's main market (ticker code:
HGEN). The Company is an Article 9 climate impact fund with an ESG policy
integrated in investment decisions and asset monitoring.

IMPORTANT NOTICE

This announcement does not constitute an offer to sell, or the solicitation of
an offer to acquire or subscribe for, shares in the Company in any
jurisdiction. The distribution of this announcement outside the UK may be
restricted by law. No action has been taken by the Company that would permit
possession of this announcement in any jurisdiction outside the UK where
action for that purpose is required. Persons outside the UK who come into
possession of this announcement should inform themselves about the
distribution of this announcement in their particular jurisdiction.

This announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's plans and/or the plans of one or more
of its investee companies or projects and their respective current goals and
expectations relating to their respective future financial condition and
performance and which involve a number of risks and uncertainties. The Company
cautions readers that no forward- looking statement is a guarantee of future
performance and that actual results could differ materially from those
contained in the forward- looking statements.

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014, as it forms part of UK domestic law ("MAR"). Upon
publication of this announcement, the inside information is now considered to
be in the public domain for the purposes of MAR. The person responsible for
arranging the release of this announcement on behalf of the Company is
HydrogenOne Capital LLP.

 

 

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